Boeing Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Miss -$1.53 -$1.03
Revenue Miss $15.2B $15.7B
Commercial Airplane Deliveries Miss 77 85 

Source: Predictions based on analysts' consensus from Visible Alpha

Key Takeaways

  • Boeing's commercial airplane deliveries missed analysts' expectations.
  • Commercial airplane deliveries provide an indicator of the level of demand for what has historically been Boeing's primary source of revenue.
  • Boeing is working with the FAA and customers to address recently discovered electrical problems with its 737 MAX aircraft.

Boeing (BA) Financial Results: Analysis

The Boeing Company (BA) reported Q1 FY 2021 earnings that missed analyst expectations. The company reported an adjusted loss per share that was significantly larger than expected, and this marked the company's sixth straight quarter of adjusted losses. Revenue also missed analyst estimates. Boeing delivered 77 commercial airplanes during the quarter, below what analysts had forecast. The company's shares were down nearly 1% in pre-market trading. Over the past year, Boeing's shares have provided a total return of 88.4%, well above the S&P 500's total return of 45.5%.

BA Commercial Airplane Deliveries

Boeing manufactures both commercial and military aircraft. Demand for the former type is much more sensitive to economic conditions, whereas demand for the latter depends on government policy decisions regarding its military program. Historically, sale of commercial airplanes has been Boeing's largest source of revenue, but that has changed recently due to the adverse impact of the COVID-19 pandemic and the grounding of the 737 MAX in early 2019 following two fatal crashes in the span of five months. The 737 MAX began re-entering service at the end of last year after meeting regulators' standards, but airlines have recently begun pulling it from service again due to electrical issues.

Global travel demand has begun to pick up again after cratering due to the pandemic. That rebound is helping to lift demand for Boeing's commercial jets. Despite missing estimates, Boeing's commercial airplane deliveries were 54% higher compared to the year-ago quarter. However, revenue from sales of commercial airplanes fell 31%. "While the global pandemic continues to challenge the overall market environment," said President and CEO David Calhoun, "we view 2021 as a key inflection point for our industry as vaccine distribution accelerates and we work together across government and industry to help enable a robust recovery."

Boeing also indicated that it was working with the Federal Aviation Administration (FAA) and its customers to address the electrical issues with some of its 737 MAX airplanes. The company said in the earnings report that it plans to gradually increase production of the aircraft to 31 per month by early next year. During the company's conference call, Calhoun warned that deliveries in April would be light due to the electrical issues but reassured that the FAA is likely to approve a fix in "relatively short order." Boeing also resumed deliveries of its 787 planes in late March after production problems were reported last year.

Boeing did not offer any specific forward earnings or revenue guidance. The company indicated in a presentation that COVID-19 case rates, the pace of vaccination, travel demand, remaining regulatory approvals for the 737 MAX, and U.S.-China relations were the main factors that could affect demand for its airplanes.

Boeing's next earnings report (for Q2 FY 2021) is estimated to be released on July 27, 2021.